China Covid Crisis Continues

Friday 29/04/22

Mass testing is now underway in Beijing, the latest mega city to face to tough wrath of the country’s zero-Covid policy.

Port and hinterland snarl-ups across the world’s most populous nation are wreaking havoc for manufacturers and logisticians alike.

While Shanghai has been grabbing the most headlines for its near-month-long lockdown, similar municipal closures are widespread across the People’s Republic. Data from research company Gavekal Dragonomics shows that as of April 20 57 out of China’s top 100 cities by GDP have relatively strict restrictions in place.

“Comments by senior automotive and electronics company executives suggest manufacturing in those industries could grind to a halt across the country if severe restrictions in Shanghai and surrounding cites do not lift by May. The prospect of escalating costs for such key industries may prompt local officials in the region to attempt more desperate solutions to keep factories humming if stringent lockdowns drag on into May,” a recent report from Gavekal Dragonomics stated.

Andrea Huang, a senior director at supply chain platform Overhaul, said that based on current trends, the lockdowns will not begin to ease until early or mid-May at the regional or district level with the ripple effect of Covid lockdowns extending into June or even further into the summer. Huang said that as Shanghai and other coastal cities reopen, container shortages will increase shipping costs.

Container port congestion at Chinese ports remains elevated with waiting times at Ningbo rising to up to seven days, according to analysis from Linerlytica, but Shanghai wait times remain at less than two days as cargo volumes have been significantly curtailed.

Imported containers are waiting on average for 12.1 days at Shanghai’s port before they are picked up by truck and delivered to destinations inland, according to supply chain data provider project44.

Information sourced from here.